Large Spatial Competition
27 Pages Posted: 29 Jun 2015 Last revised: 9 May 2016
Date Written: May 09, 2016
We consider spatial competition when consumers are arbitrarily distributed on a compact metric space. Retailers can choose one of finitely many locations in this space. We focus on symmetric mixed equilibria which exist for any number of retailers. We prove that the distribution of retailers tends to agree with the distribution of the consumers when the number of competitors is large enough. The results are shown to be robust to the introduction of (i) randomness in the number of retailers and (ii) different ability of the retailers to attract consumers.
Keywords: Hotelling games, large games, Poisson games, valence
JEL Classification: C72, R30, R39
Suggested Citation: Suggested Citation